Home Audio Market Research, Analysis and Commentary

09 Jan 2018 - Wireless speakers accounted for three in every four shipments across the entire home audio hardware category in 2017, according to global end-of-year estimates released by Futuresource Consulting.

"Wireless speakers have become a dominant force in home audio hardware, with shipments increasing more than 30% in 2017, boosting the performance of the wider category beyond industry expectations," says Simon Bryant, Director of Research at Futuresource Consulting.

"However, the real star of the show is the smart speaker sub-segment. Introduced just two years ago, smart speakers have captured the imagination of consumers and are enjoying high levels of uptake, despite limited worldwide availability."

USA and UK Leading the Way

According to Futuresource estimates, 25 million smart speakers were shipped in 2017, with the USA and UK accounting for 95% of total global sales. "North American and British consumers are highly receptive to new technologies and gravitate towards gadgets that save time or improve their work life balance," says Bryant. "Combine this with improvements in voice technology, improved functionality, good quality sound output and some high profile promotional activity and you have all the ingredients for vigorous growth.

"We're also seeing rapid price erosion, as Google and Amazon draw the battle lines. Smart speakers are moving towards the 100 dollar sweet spot, used as loss-leaders to populate homes with what could become home retail terminals, linking consumers to a supply chain that opens the door to a range of services. The winner of today's smart speaker land grab could be the owner of tomorrow's consumer."

Platform Proliferation

Although Google's share continues to grow from quarter to quarter with its Google Home product, Amazon still commands the lion's share, accounting for more than 80% of the market. At least eight other platforms emerged in 2017, along with almost every major audio brand announcing support for voice technology, including Sony, Panasonic, Harman, Apple, Samsung, Ultimate Ears and Sonos. In the second half of 2017, the number of smart speakers available on the market increased from just 10 to more than 40.

"All this activity from the brands and the falling price point is resulting in high levels of multiple ownership," says Bryant. "It's far more pronounced than we've seen for any other audio device. Smart speaker households are likely to own two or more devices, not least because bridging devices are available at cheaper price points and the hardware brings an element of fun to otherwise dreary everyday tasks.

"Beyond leisure activities, like music and video search and consumption, smart speakers make checking the news and weather, switching appliances and lights on and off, and controlling the heating all a little more entertaining."

The Future of Smart Speakers

Moving forward, Futuresource expects developed markets to reach saturation point by 2020, while emerging markets will continue to witness robust growth out beyond the forecast period (2021).

"Watch this space for speakers that support multiple voice platforms," says Bryant, "allowing consumers to choose their smart speaker based on the feature set rather than the voice platform it supports. The Sonos One leads the way here, and will be able to support both Alexa and Google voice platforms later this year.

"Smart speakers with screens will also begin to gain traction, as voice interaction alone can have its limitations for content discovery. The inclusion of screens will also begin to blur the lines between smart speakers and tablet devices."

Notes:

Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com

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